The gravy train: Rail firms make £3.5 billion profit – from OUR subsidy – while the service fails

The Office of Rail and Road tells us that, in 2015-16, the total amount of government subsidy – the money we pay to the rail companies, despite the railways having been privatised in 1994 – was £3.999 billion.

So seven-eighths of that amount – almost all of it – has been taken as profit by the people named in the extract below.

Almost none of it has been used to improve the service and it certainly seems unlikely that any of it is being used to keep rail fares at a reasonable price.

This leads inexorably to the obvious question:

Isn’t it time the Conservative Government ended the rail subsidy?

It certainly isn’t being used for the intended purpose – “operating, maintaining, renewing and enhancing the railway”.

And it certainly isn’t helping passengers.

Isn’t it time we shunted this subsidy into the sidings and told the money-grubbing controllers to fend for themselves?

Private train operators have creamed off £3.5billion from running our railways over the past 10 years.

These gigantic profits come despite passengers having to deal with overcrowding, delays, cancellations, strikes and among the highest ticket prices in Europe.

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As the figures above show privatisation was only ever about the Tories and their chums making a great deal of money at our expense. Those figures don’t appear to include the money paid out to the foreign state-owned rail companies who run some of the so-called private rail operations. We even subsidise European rail travel in France and Germany because, under the Tories, although our own government isn’t allowed to run a rail service foreign governments are allowed to run them. Bring Back British Rail and, given the same subsidies the private operators get, I am certain we would get a far better service.

This is scandalous. Public money is effectively being put into private pockets for doing nothing except ruining public transport in the U.K. The reality is that these huge subsidies actually amount to publically funded transport with none of the control over policy. It’s time the Tories admit that this is yet another of Thatcher’s policies designed as a deliberate attack on the Trade Union movement.

Thatcher hated the Unions and made it her priority to particularly attack the ‘big three’ industries, Coal, Rail and Steel, the heart of the industrial base of the UK. She succeeded in destroying Coal, ruined Steel and crippled Rail and to her delight weakened the Unions.

The other consequence was the destruction of the UKs manufacturing base and the increased prominence of the Financial Sector which still produces huge financial instability in the markets due to unfettered and unsustainable speculation. The various economic crashes and crises that so destabilise our and the worlds economy were the predicted outcome of this change.

The Tories are directly to blame for this but I don’t expect them to accept that blame.
They have no sense of shame.

Agree with all you say, except that in fact so-called privatisation of the railways came under John Major’s government and, if I remember correctly, was rushed through shortly before the 1997 election in order to try to get them through before a Labour Government was elected. Sadly Blair’s government didn’t unravel it all as it should have done.

Undoubtedly EU law will be a huge obstacle to any renationalisation scheme – especially one that aims to do away with competition and markets. The EU is clear that its objective is “Opening up national freight and passenger markets to cross-border competition”. Its directives and regulations have created what can only be described as a legal quagmire.

The main EU law in this area was the First Railway Directive (which was replaced and upgraded in 2012 with a new version). This was the original law that gave the Tories the excuse they needed to introduce their privatisation agenda in the nineties. That law enshrined the role of the private sector by making it a legal requirement for independent companies to be able to apply for non-discriminatory track access on a member state’s track, calling for:

“separating [of] the management of railway operation and infrastructure from the provision of railway transport services, separation of accounts being compulsory and organizational or institutional separation being optional.”

The 2012 Directive has kept that principle and goes even further, and says that one of its aims is “to boost competition in railway service management”. It also stipulates that: “Greater integration of the Union transport sector is an essential element of the completion of the internal market… The efficiency of the railway system should be improved, in order to integrate it into a competitive market”.

In short, this means that multiple train operating companies must be allowed to use the same track competitively. In Germany it has resulted in the state-owned Deutsche Bahn facing more and more competition from other firms.

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